Boosting Economy Through Palm Oil Production

Nigeria has the potential to harness its palm oil production to boost its economy, given the country’s favorable climate and vast land resources suitable for palm cultivation.

Experts stated that with the global demand for palm oil on the rise, Nigeria can capitalize on this opportunity to increase its foreign exchange earnings, create jobs, and stimulate economic growth. By investing in the palm oil industry, Nigeria can reduce its dependence on crude oil and diversify its economy.

There are several companies in Nigeria are involved in oil palm production, with Okomu Oil Palm Plc and Presco Plc being the two largest, and listed on the Nigerian Exchange (NGX).

In its report tittled, ‘2025 Oil palm sector report: reviving the red gold: seizing opportunities in the global market’, Afrinvest Limited said, “domestic oil palm production in Nigeria remained flat at 1.5m MT in 2024, while consumption grew 4.6 per cent year-on-year to 2.0m MT, widening the supply gap to 450,000 MT.

“The sector remains constrained by low mechanisation and dominance of small holder farmers. Structural bottlenecks including limited access to finance, low yield planting materials, fragmented land ownership, and poor rural infrastructure continue to limit Nigeria’s ability to scale oil palm production to meet domestic demand.”

The report stated that “the global pivot toward biofuels is tightening palm oil supply as top producers like Indonesia and Malaysia divert output for domestic energy use, driving up prices.

“This shift presents a strategic opportunity for Nigeria to revive the ‘Red Gold’ by transforming its underperforming oil palm sector into a regional hub and closing a 450,000 MT annual supply gap. With over 2.5 million hectares of suitable land and growing investor interest, coordinated action is needed to scale up production, improve processing capacity, and integrate biofuels. A National Palm Oil Strategy focused on finance, import substitution, exports, and sustainability could unlock the sector’s full potential.”

The director/CEO of the Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf highlighted the untapped potential of Nigeria’s oil palm sector, noting that while investment levels have not yet reached optimal levels, there has been significant growth in recent years.

“This uptick in investment is largely attributed to the global performance of palm oil prices, drawing increased interest from both local and foreign investors,” he said.

He referenced successful companies like Okomu Oil and Presco Oil, which are now listed on the stock exchange and performing well.

Yusuf acknowledged that the oil palm sector had suffered from neglect, particularly due to the dominance of oil in Nigeria’s economy, which overshadowed the agricultural sector, including vital cash crops like cocoa.

However, he pointed out that some regional governments, such as those in Edo State and parts of the Southeast, have started to invest more heavily in oil palm cultivation.
He emphasized the gradual progress being made, noting that the inherent time required for such investments to mature and yield returns, as oil palm and similar crops typically take several years to bear fruit.

Yusuf added that “we remain optimistic about the future of the oil palm sector, recognizing the improvements that have been made despite the historical challenges.”